CHOICE HOTELS INTERNATIONAL, INC.

This company offers a lot of hospitality choices. Choice Hotels is a leading hotel franchisor with more than 6,500 locations throughout the US and more than 35 other countries. Its flagship brands include Comfort Inn, one of the largest limited-service brands with about 3,000 properties (including Comfort Suites) along with Quality Inn, which serves the midscale hotel segment. Its Econo Lodge chain offers lodging primarily for budget-minded travelers. Other Choice Hotels brands include the full-service Clarion chain, Rodeway Inn budget hotels, and Sleep Inn.

Geographic Reach

In 2013 Choice Hotels moved to new global headquarters in Rockville, Maryland.

With some 1,160 hotels located outside the US, the company's international franchising operations account for less than 10% of sales. During the first half of 2012 Choice Hotels opened new international properties in Australia, Brazil, Canada, Czech Republic, France, Germany, Honduras, Italy, New Zealand, and Norway.

Sales and Marketing

The company spent $79.7 million on advertising in fiscal 2012.

Financial Performance

Choice Hotels gets nearly all of its revenue (more than 90% in fiscal 2012) from royalty fees and by providing marketing and reservation services for its franchisees. In fiscal 2011 and 2012 the company reported growth in revenues and profits compared to the previous year, thanks to a recovering economy. Specifically, revenue increased by about 8% and net income increased by more than 9% in fiscal 2012 compared to 2011.

Revenue increased from $596.1 million in fiscal 2010 to about $638.8 in fiscal 2011. Revenue went up to $691.5 million in fiscal 2012. The revenue increase was attributable to an increase in royalty fees due to higher revenue per available room, an increase in the effective rate of the domestic hotel system, and an increase in franchising revenues. Net income increased in fiscal 2012 due to the increase in revenue and a lower income tax rate versus the prior year.

The company's cash flow was positive during fiscal 2012 due to increased cash from operating activities offset by increased use of cash from investing activities. The increase in cash utilized for investing activities from 2011 to 2012 was primarily due to an increase in capital expenditures, an increase in net financing provided to franchisees, and equity method investments entered into during fiscal 2012.

Strategy

Choice Hotels tries to increase its profits by improving the performance of its existing hotels, increasing system size by selling additional hotel franchises, effective royalty rate improvement, and maintaining a disciplined cost structure.

The company's strategy includes offering a mix of segmented brands for consumers and developers. Being a franchisor rather than a hotel operator has helped it expand Choice Hotels' portfolio of properties in a relatively low-cost manner. During 2012 Choice Hotels had a pipeline of some 450 hotels under construction, awaiting conversion to one of its brands, or approved for development.

Ownership

Chairman Stewart Bainum and his family control more than 80% of the company along with board member Scott Renschler and his family.

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CHOICE HOTELS INTERNATIONAL, INC.


1 Choice Hotels Cir Ste 400
Rockville, MD 20850-5140
Phone: 1 (301) 592-5000
Fax: 1 (301) 5926157
www.choicehotels.com

STATS


  • Employer Type: Public
  • Stock Symbol: CHH,
  • Stock Exchange: , NYSE
  • President, Director and CEO: Stephen Joyce
  • President, Director and CEO: Stephen Joyce
  • EVP and COO: Patrick Pacious

Major Office Locations

  • Rockville, MD

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